According to a report by China's National Audit Office, the total debt of local governments has ballooned to about 17.9 trillion yuan, or nearly $3 trillion. The figure rose 12.7% in the six months between December 2012 and June 2013. Analysts have warned that much of the local government debt was used to fund projects that may never produce returns sufficient to cover the repayment of the principal and interest on the loans.

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